Around the country, state transportation agencies are exploring various types of innovative project delivery, including partnerships with private construction or asset management firms to promote cost savings and efficiencies, reduce risk, and/or leverage expertise and experience. One example of these Public-Private-Partnerships (PPP) is the State of Indiana’s leasing an interstate highway to a private firm to toll, maintain, and operate in exchange for funding directed towards other state transportation activities.  A smaller and more common example of PPPs is the consolidation of design-bid-build process to one construction firm.  The Federal Highway Administration is increasingly promoting these partnerships through pilot programs and new guidance.

Massachusetts’ experience with Public-Private-Partnerships has been mixed.  PPP’s have been utilized by the MBTA for operation and management of the commuter rail system.  The operator, Mass Bay Commuter Railroad Co. (MBCR), has been more successful than the MBTA in addressing capital planning and expenditure issues on the commuter rail.  However, MBCR has also been criticized for poor service quality; and the MBTA finds itself with limited alternatives now that MBCR is in place and running the service.  Modern Continental was contracted to reconstruct and operate Route 3 north of Route 128, but the operation portion of the contract was never executed because of Modern Continental’s liquidity issues.

These examples and experiences in other states demonstrate that the advantages of PPPs are also accompanied by considerable risk.  Successful application of PPPs for complex, expensive, and high-profile projects requires considerable institutional capacity to plan, negotiate, and manage these arrangements.  The Commonwealth’s transportation agencies should build this capacity through a series of smaller, standardized pilot projects where contracting and operational models can be tested.  The experience and practices developed through these pilot projects can then be applied to efforts of increasing scale and complexity.

24.a    EOTPW should convene a reform committee to review the bid, design, and construction process for transportation projects with a mandate to implement time and cost saving reforms. 

24.b    EOTPW should develop a pilot program to use design-build contracts on common projects (such as footprint-bridge and roadways)

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